‘It was very, very, very tough… I feel proud as an African that I’ve been able to prove that it can be done and we have done it.”
. ‘PMS will flow from refinery by the third week of July,’ Aliko explains how Africa Continental Free Trade Area, AfCFTA agreement can work
Aliko Dangote On CNN
So, if Aliko Dangote, President and Chief Executive of Dangote Industries Limited, and Africa’s richest man, says, in retrospect, that had he known the grand scope of what he was getting involved in, he wouldn’t have tried it, you would understand.
According to Dangote, during an interview on a CNN programme, Connecting Africa, “People don’t really understand what we undertook to build the refinery. In fact, we didn’t know what we were getting into. If we knew, we would have run away. We wouldn’t have tried it. It was very, very, very tough. We are sitting on a land that is more than 4000 standard football fields. The significance of this project is that we will be self-sufficient, not just in Nigeria but in West and Central Africa. I feel proud as an African that I’ve been able to prove that it can be done and we have done it.”
$19 billion cost
Speaking on what it has taken to put up the edifice, he said “we spent about $19 billion. It is going to change the game in terms of improvement. If we take in all the crude from Nigeria, it means that we will be taking about 21 million barrels per month. That would also help in terms of reducing the Co2 initiative, rather than ships coming all the way from Europe to bring in products. All the ships going out of Nigeria every month, then you have the products coming into Nigeria. In totality, when you calculate, you are talking about 480 ships of 1 million barrels. That actually will save the environment almost 1.5 to 2 million tonnes of Co2 emissions.”
Asked whether he has started making money from the project, he said: “We will start making money soon. It is not just all about making money, but it also gives us great satisfaction that we are making Africa great. We are making Africa proud.”
AfCFTA & Overcoming challenges
There has always been the issue of crude supply, and this was discussed during the interview. In his view, he agreed “that there are challenges here and there. That is the truth. We have to be very open too.
NNPC has been very, very helpful. They do their own bit. Some of the IOCs are struggling to give us crude oil. Because everybody is used to exporting, and nobody wants to stop exporting”.
Size
For context, it is a 650,000 barrel refinery, the biggest in the world. It started in 2016.
Inside the plant itself, Aliko Dangote constructed about 126 km of road. There are 54,000 storm columns built for protection. On-site, there are over 200 buildings. Located in Ibeju-Lekki, Lagos, covering a land area of approximately 2,635 hectares (seven times the size of Victoria Island, Lagos), it is the world’s Largest Single-Train 650,000 barrels per day Petroleum Refinery with 900,000 tonnes Polypropylene Plant. At the peak of construction, there were over 70,000 workers on site.
In the course of the civil works, some 700 piles were drilled daily, and the total number of piles came to 250,000. It has 177 tanks of 4.742 billion litre capacity – you can imagine that volume. He has bought over 2,262 units of various high-duty equipment to enhance the local capacity for site works since even the biggest local civil contractors are unable to handle “even small portions of our construction requirement.” He has also bought 308 cranes to build up equipment installation capacity since the current capacity in Nigeria is extremely poor. What do you do when the biggest crane in the country is 650 tons, whereas you need a 5000-ton capacity crane? Worse, there were only two such 5000-ton capacity cranes in the world, and they were in use. So, instead of hiring a crane for $300,000 a day, what do you do? Dangote bought his cranes. 65 Million Cubic Metres of Sand were dredged costing approximately 300 Million Euros, using the world’s largest, the second largest and the tenth largest dredgers to elevate the height by 1.5/1.75 metres, to insure against any potential impact of increase in mean sea level due to global warming.
That is not all.
The refinery has a 435 MW Power Plant, which can meet the total power requirement of Ibadan DisCo of 860,316 MWh covering five states, including Oyo, Ogun, Osun, Kwara and Ekiti. Dangote Petroleum Refinery can meet 100% of the Nigerian requirement of all refined products (Gasoline, 53 million litres per day; Diesel, 34 million litres per day; Kerosene, 10 million litres per day and Aviation Jet A1, 2 million litres per day) and also have surplus of each of these products for export.
Even Aliko Dangote himself asked Eleni Giokos, the CNN anchor, “Why do you think Africa is not growing as it should?”
Dangote answered the question himself: “It is because we export raw materials and import finished goods. It doesn’t matter what it is, whether it is gold or whatever. A raw material is always at a ridiculously priced amount compared to the finished goods.”
Asked how he hopes to battle this legacy system that profits from the ripoff of focusing on Africa’s raw materials instead of building capacity for processing on the continent, Dangote said “I have been fighting battles all my life, so I don’t get scared of anything.”
On the African Continental Free Trade Area, AfCFTA, Dangote believes it will be beneficial: “The AfCFTA will be very, very beneficial. If you are talking about benefits, our company will almost be one of the top five in terms of benefitting from the free trade agreement. But I have not seen any improvement. We have 3 million tonnes of Urea we export to African countries, and we have petroleum products to export. We have cement to export. We have too many things to export. What makes sense is to have the free trade agreement work. The trade between Africans is only about 16 per cent, which is too low. We have to make sure that all the regional markets have to remove these requirements of visas. We have to allow free movement of people, free movement of goods and services, and the Afcta will work. Without that, it is almost impossible.”
Intra-Africa trade issues
Dangote then shared an experience: “I am going to Egypt tomorrow, but I need a visa. They are saying that they will give me a visa on arrival if I have an American visa. But I am an African, and Egypt is part and parcel of AfCFTA. But they are saying that no, if you have an American visa, we will give you. So, they are discounting me, being an African. So, how do we trade if you’re not allowing me into their country? What I would love to see is a South African come into Nigeria to get a job without hassle. If you don’t integrate, we will never see what we call prosperity. Integration is very important. If you remember, most countries used to have what we call the Ministry of Integration, but I don’t know what happened. Some of the countries have dropped this, and it doesn’t make sense.”
Aliko Dangote has his eyes set on the future with the succession plan of the group well laid. According to him, “by the end of the year, he expects that the group’s revenue should be around $ 30 billion, thereby placing the company among the best 120 companies in the world.”
PMS delivery date
Last week, during a visit by the leadership of the senate, led by Senate President Godswill Akpabio, to the premises of Dangote Refinery, some of the legislators who had not visited the site were left to marvel at the size of the complex. The question always asked by Nigerians about the refinery is focused mainly on the delivery day when Premium Motor Spirit, PMS (otherwise known as petrol) would flow. Yes, they should be concerned, not with the price of petrol hovering around N600 and 800 per litre, depending on which part of the country you reside or you are to buy from.
In responding to the question, Dangote explained: “It is good for us to test all the types of crudes that we are receiving. You know sometimes you can buy crude and people can give you the one that has a lot of metal or a lot of sulphur. But the most important thing is that we know West Africa is a home for dumped bad fuel and bad Petroleum products. This lab that we have here you can not even find it in Saudi Aramco because we have the latest and we can test anything be it aviation fuel, diesel, gasoline and kerosene and it will give you the actual result. The longest time a test will take here is 30 mins. As for PMS, it will start coming out by 10/15 of July. We want to keep it in the tank to make sure that it settles, and by the third week in July, we want to be able to take it into the market.”
Revelations from Afreximbank meeting in Bahamas
Last week, Dangote made some disclosures at the Afreximbank Annual Meetings, Dangote likened the oil cartels to a mafia stronger than the drug mafia hell-bent on maintaining their grip on the industry.
He said: “Well, I knew that there would be a fight. But I didn’t know that the mafia in oil, they are stronger than the mafia in drugs. I can tell you that. Yes, it’s a fact. But I’m a person who has been fighting all my life. You know, so I think it’s part of my life to fight. As a matter of fact, during the COVID period, some of the international banks really were looking forward to making sure that they pushed us into the default of our loans so that the project would just be dead. And that didn’t happen with the help of banks like Afreximbank.”
Dangote also disclosed that he has paid off $2.4bn of the $5.5bn borrowed for the Lagos-based refinery.
